November 1, 2011

Artist’s Resale Royalties [2:59 pm]

This is going to be quite a case: Artists File Suit Against Sotheby’s, Christie’s and eBay [pdf]

When the taxi baron Robert Scull sold part of his art collection in a 1973 auction that is considered the beginning of today’s money-soused contemporary-art market, several artists watched the proceedings from a standing-room-only section in the back. There, Robert Rauschenberg saw his 1958 painting “Thaw,” originally sold to Scull for $900, bring down the gavel at $85,000. At the end of the Sotheby Parke Bernet sale, Rauschenberg shoved Scull and yelled that he didn’t want to work so hard “just for you to make that profit.”

The uproar that followed led the California legislature to pass a law, the California Resale Royalties Act, requiring anyone reselling a piece of fine art who lives in the state, or who sells the art there for $1,000 or more, to pay the artist 5 percent of the resale price.

That law is now at the center of a pair of class-action suits brought by the artists Chuck Close and Laddie John Dill and the estate of the sculptor Robert Graham against the auction powerhouses Sotheby’s and Christie’s and the online auction site eBay for failure to pay royalties.

“It’s a question of basic fairness,” Mr. Close said recently in an interview. When purchasers are getting extraordinary returns on their investment, he said, a royalty resale law allows the artist to share, at least in a small way, in the increase in value. (Under the California law, no payment is due if the price drops.)

[...] John Henry Merryman, a law professor at Stanford University and an expert on art and cultural-property law, said that advocates of the droit de suite ignore how the art market operates. The increased price for Rauschenberg’s “Thaw” at the Scull auction was due not only to the artist’s continuing creative efforts, he said, but also to the dealers, collectors, auction houses and critics who took a risk in supporting and buying Rauschenberg’s work before he was famous. He noted that the increased price for a single painting simultaneously raises the value of all the artist’s work.

Mr. Merryman dismissed the argument that the droit de suite was analogous to music or literary royalties. “The idea that somehow artists are hurt because they don’t have copyright is nonsense,” he said. Artists retain copyright and must be compensated if their work is reproduced. The difference, he explained, is that “the realization of a work of art is in exhibition, not in duplication.”

The Whitney Museum of American Art at one time compensated artists for exhibiting their work. The idea never caught on, but it makes more sense, Mr. Merryman said.

I look forward to an explanation of exactly how this constitutes “fairness” in this context. Absent a finding that US copyright law is going to move toward a wider application of European droit d’auteur (and, as the article states, droit de suite), I cannot imagine this is going to go very far — but never say never…..

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